Alabama

Boeing found in violation of international trade rules

View full size(AP Photo/Azamat Imanaliev)A lineup of U.S. air force KC-135 tanker planes seen at the Manas air base in Bishkek, Kyrgyzstan on Feb. 18, 2009. A trade court issued a ruling Wednesday that said Boeing -- competing with Airbus to replace the aging tanker -- had violated international trade rules.

GENEVA — European officials claimed Wednesday that a preliminary decision by the world’s top trade court found that aid to U.S. aircraft maker Boeing violated international rules, leading to the prospect that the Chicago-based plane maker may have to forgo or even pay back billions in subsidies.

France’s transport and environment ministers said the confidential World Trade Organization ruling delivered to U.S. and European Union officials in Geneva “condemns massive subsidies to Boeing that violate WTO rules.”

Details of the ruling weren’t made public, and a final judgment isn’t expected to be released for several months.

It comes three months after the WTO found that Boeing’s European rival, Airbus, gained an unfair advantage through billions worth of low-interest government loans, infrastructure provisions and research and development grants. Both Washington and Brussels have appealed that decision.

“The ruling swings the pendulum back,” the French environment and transport ministers, Jean-Louis Borloo and Dominique Bussereau, said in a joint statement. “This ruling brings enormous satisfaction to the French and European aviation industry and saves jobs and the future of this industry.”

The Office of the U.S. Trade Representative in Washington confirmed receipt of the ruling.

“This dispute has proven to be one of the most complex and lengthy disputes under the WTO,” said USTR spokeswoman Nefeterius Akeli McPherson. “As the interim report is confidential, we cannot discuss the contents.”

Officials at Boeing didn’t immediately comment.

Ahead of its release, a senior Boeing official rejected suggestions that the ruling should be tied to the Airbus case, offering the way for a negotiated settlement between the two parties.

“The two cases are completely separate and deal with very specific issues,” Ted Austell, vice president of trade policy at Boeing, said Tuesday.

John Clancy, an EU trade spokesman, said Wednesday’s ruling would be studied carefully before Brussels decides how to proceed.

But he added that “only negotiations at the highest political levels can lead to a real solution, and we hope today’s report provides momentum in that direction.”

The six-year dispute is seen as key to future funding for new plane development in a market estimated to be worth more than $3 trillion over the next two decades.

EADS, the parent company of Airbus, and Boeing are vying to secure a $40 billion contract to provide aerial tankers to the U.S. Air Force.

EADS is proposing to assemble its tankers in Mobile.

The Air Force has said it will not factor the WTO rulings into the tanker competition, a move that Alabama political leaders said was validated by Wednesday’s WTO decision.

“Since June, the WTO’s investigations have found that both manufacturers received government subsidies. It remains clear this issue should have no relevance in the ongoing competition between EADS and Boeing,” said U.S. Rep. Jo Bonner, R-Mobile.

Supporters of Boeing’s tanker bid said the decision was proof that European subsidies helped eliminate American jobs.

“This ruling reinforces what I have said all along, Boeing and its workers have been competing on an uneven playing field,” said U.S. Sen. Patty Murray, D-Wash.

(Press-Register Political Editor George Talbot and The Associated Press contributed to this report.) 